Lien On Me

Homer Williams builds new projects while owing the IRS and his ex-wife millions.

Homer Williams is perhaps Portland’s best-known developer,
famous for creating new neighborhoods like the Pearl District and South
Waterfront.

Williams—a top
campaign contributor to Mayor Charlie Hales—is scheduled to buy a prime
chunk of Riverplace real estate from the city next month. He’s also
building a new Pearl District hotel, and planning a second on the city
property, with the help of a federal program.

But records show
Williams is taking on these projects while deeply in debt, including
$2.6 million in back taxes he owes the Internal Revenue Service.

And as of last fall, he owed another $1.2 million after falling behind on a divorce settlement with his ex-wife, Joan.

Williams says his
financial problems date back to the real-estate market collapse. He says
he was blind-sided when the market cratered in 2007, after he and his
partners built $1 billion worth of condos in South Waterfront.

“There was a ton of money coming in, and then everything stopped,” he says. “Everything.”

Throughout his
40-year career, Williams has pulled off deals that others could
not—finding financing for Forest Heights’ steep terrain from the
guano-rich South Pacific island of Nauru; developing the Broken Top golf
community in Bend; and now pioneering the use of a federal program that
allows foreign nationals to obtain U.S. passports by investing at least
$500,000 in the United States.

“Homer is truly a visionary,” says fellow developer Mark Edlen.

Williams, 68, may be
best known for helping convert contaminated rail yards into the Pearl
District or for pioneering the condo towers in South Waterfront.

“He’s
had an enormous impact,” says Will Macht, a developer who’s taught
real-estate courses at Portland State University for 28 years. “He’s
taken risks that other developers would not take. And many times, he’s
been successful.”

Williams is using the
foreign-investor program known as EB-5 to build a hotel near Union
Station. On Feb. 27, he’s scheduled to buy a 1.12-acre parcel in
Riverplace from the city-owned Portland Development Commission to build
another hotel.

Last September, his
ex-wife, Joan Williams, won a judgment against him in Multnomah County
Circuit Court. Her lawyer said Williams had not made a monthly support
payment since 2008, putting him $888,000 in arrears.

He was also $389,500
behind on a property settlement, bringing the total he owed to more than
$1.2 million. Williams agreed to a payment plan and now says he is
current on that debt.

The court filings
show wild swings in Williams’ financial fortunes. In 2008, for example,
he reported having earned $1.9 million. The next year, he claimed in
court records, he earned just $100,000.

Williams’ debt to his
ex-wife is the least of his problems. On Jan. 18, 2012, the Internal
Revenue Service filed a tax lien against him for $2.64 million. The lien
provides the federal government security for unpaid taxes he owes the
IRS—$2.12 million for 2006 and $515,000 for 2007.

Those were the years the cash rolled in from the South Waterfront condos, which initially sold like discounted iPhones.

“It goes back to when
the market crashed,” he says of his IRS debt. “I’ve got a program
worked out with them. I hope to have that cleaned up in the next couple
of years.”

Ironically, it’s probably the feds—through EB5-funded hotel projects—who will help Williams pay his back taxes.

Williams is a past master at leveraging public dollars.

For decades, the
heavily polluted industrial lands at South Waterfront lay fallow, until
he persuaded the city in early 2001 to sell him land there and invest
more than $200 million in streets and other infrastructure to build the
new neighborhood.

In the late 1990s,
while Williams developed condos in the Pearl District, then-City
Commissioner Hales built the Portland Streetcar, connecting the Pearl
with downtown.

When Hales entered
the mayor’s race in 2011, Williams and his business partner, Dike Dame,
gave Hales $5,000 in the primary and $10,000 for the general election.
They made no contributions larger than $3,000 to any other candidate in
2012, state records show.

The Riverplace deal
would mark the PDC’s first significant transaction since Hales took
office, although the terms were agreed upon last August. Williams
started negotiating for the land in 1999, and the deal took so long that
the PDC is selling at a market price, rather than subsidizing
development as it often does. (Hales has not been involved in the deal,says mayoral spokesman Dana Haynes.)

The PDC board had
questions about the deal, but none related to Williams’ personal
finances. PDC spokesman Shawn Uhlman says Williams’ personal finances
were not an issue because his company is paying cash.

Williams
says his personal debts are not affecting his business operations.
“Have I had some problems?” he says. “Yeah, but we’re actually doing
quite well right now.”